Buyers point to loopholes in Rajya Sabha report on real estate bill

Before the Bill is finalized, homebuyers' groups want to draw attention of legislators to the proposed Bill which they feel leave scope for loose interpretation, allowing builders to evade responsibility in those issues.Sharmila Bhowmick | TNN | August 03, 2015, 07:50 IST

NOIDA: NCR homebuyers, who made significant contributions in the shaping of the Real Estate Regulation and Development Bill, have by and large welcomed the report by the 21-member select committee on the Bill, submitted to the Rajya Sabha on July 30. At least 10 homebuyers' associations were consulted by the committee for suggestions. They though raised serious doubts on some clauses in the report.

Before the Bill is finalized, homebuyers' groups want to draw attention of legislators to the proposed Bill which they feel leave scope for loose interpretation, allowing builders to evade responsibility in those issues. "One of the major issues we would like to highlight is that the report suggests the Act would be applicable only to those projects that are built over plots 1,000 sqm and above in size.The same clause also specifies the Act would be applicable to projects with at least 12 apartments. We consider this a serious loophole, with possibility for a lot of misuse in the future. All projects, irrespective of the area on which they are built or number of flats they contain, should be included in the Act," said advocate Rahul Kumar, co-founder of NCR Homebuyers Association and a legal advisor to the group.

The homebuyers also claimed the clause that allows builders to deposit a mere 50% of payments by buyers in an escrow account, may be reversed to 70%, which was the existing provision. "The 70% deposit was a safety net for buyers. With only 50% as deposit, builders may over-extend themselves in new projects, while neglecting older ones," said Rashesh Purohit, co-founder of NCR Homebuyers Association.

Buyers though greeted the suggestions in the report regarding layout plan. "The report clearly states the layout of a project will need to be publicly declared even before applications are invited. It also makes mandatory that no changes will be allowed in the layout, after a project is announced and sold. All buyers welcome this suggestion as changes in layout plan is a common complaint among buyers," Indrish Gupta, co-founder of the Noida Extension Flat Owners Welfare Association said.

"We're presently studying the 143-page report. It is a legal document with various clauses. We will soon come out with our formal response," Rahul Kumar said.